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SAN FRANCISCO — Google Inc.'s new year is picking up right where 2005 left off — with ever-loftier expectations for the company's soaring stock and a feverish guessing game about the online search engine leader's next big move.

Confident that Google will double in size during the next two years, Piper Jaffray analyst Safa Rashtchy on Tuesday issued a research report predicting that the company's shares will hit $600 before 2006 is over.

The forecast makes Rashtchy the first prominent securities analyst to set a $600 target for Google's shares. "I am not trying to be heroic or controversial," he said during an interview. "I just thought that I should start the new year by trying to figure out what looks like a fair valuation."

The optimistic outlook helped lift Google's shares $20.37, or 4.9 percent, to close at $435.45 on the Nasdaq Stock Market. The shares have traded as high as $446.21 since being priced at $85 in an August 2004 initial public offering.

Meanwhile, Google's allies and foes alike are trying to figure out what company co-founder Larry Page might announce Friday when he is scheduled to speak at a huge consumer electronics trade show in Las Vegas.

A published report suggesting that Google plans to sell a low-priced personal computer through Wal-Mart Stores Inc. stirred some excitement but company spokeswoman Eileen Rodriguez shot down the speculation Tuesday in a prepared statement.

"We have many PC partners who serve their markets exceedingly well and we see no need to enter the market," Rodriguez said.

Analysts nevertheless believe Google is planning to unveil a significant new initiative during the trade show.

The most prevalent guesses center on a Google computing device that will make it easier to link the search engine with television and more software products aimed at undermining one of Google's biggest rivals, Microsoft Corp.

Even if Google doesn't push into new frontiers, the company is expected to prosper as the worldwide market for search engine advertising continues to grow from an estimated $10 billion last year.

Rashtchy expects $33 billion to be spent by 2010 on search engine ads, with most of that money flowing to Google.

If Google's shares reach $600 this year, they will have to appreciate by about 45 percent — a deceleration from last year when the stock more than doubled from 2004's closing price of $192.79 per share. At $600 per share, Google's market value would exceed $170 billion — more than all but a handful of companies.

Based on his latest projections, Rashtchy expects Google to earn $2.7 billion on revenue of $9.3 billion this year followed by 2007 net income of $3.7 billion on revenue of $12.6 billion. Google won't report its official 2005 results until later this month, but analysts believe the company made about $1.5 billion on revenue of roughly $6 billion last year.